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Cyprus

Foreclosure law suspension unnecessary, damaging, finance minister says (Updated)

Finance Minister Harris Georgiades

By George Psyllides

FINANCE Minister Harris Georgiades sharply criticised opposition parties on Thursday for suspending the law on foreclosures describing it as an unnecessary decision, which critically undermined the country’s credibility.

Earlier, opposition parties ignored warnings once again, and voted to suspend enforcement of the law on foreclosures until the end of January.

“Today’s decision by parliament critically undermines our country’s credibility,” Georgiades said in a statement. “Suspending enforcement of legislation, which is not enforced anyway, is an unnecessary and unjustified act. It simply sends the message that we have not, unfortunately, rid ourselves of the mentality and behaviour that cost us so dearly.”

The proposal, submitted by EDEK, passed by majority vote – 34 to 19. Ruling DISY voted against the bill warning that it jeopardised the island’s bailout programme and dealt a blow to Cyprus’ credibility.

Opposition parties claim that the suspension was necessary to give time to the insolvency framework to be prepared so that it provides a safety net to vulnerable groups.

Before the law enters into force, it has to carry the president’s signature or the acting president in his absence.

President Nicos Anastasiades who is recovering from a heart operation he underwent in New York on December 3, is expected to return to Cyprus on Sunday. At present, parliament speaker and socialist EDEK chairman Yiannakis Omirou is holding all his powers.

“We will see on Monday whether the president will assume his duties,” government spokesman Nikos Christodoulides said. “On Monday we shall know”.

Suspension of the law came a couple of days after Cyprus received €350 million as part of its €10 million bailout.

The cash should have been disbursed in September but it was withheld by the European Union after opposition parties passed legislation limiting the scope of the foreclosures law.

The funds were released after the opposition bills were thrown out by the Supreme Court as unconstitutional.

The International Monetary Fund was expected to release an additional €86 million.

Before voting on EDEK’s proposal, parties rejected a bill tabled by main opposition AKEL to suspend the law until the end of June.

Thursday’s vote was preceded by an intense debate with DISY MPs warning of the consequences of suspending an inactive law that was part of the terms of the island’s bailout agreement.

Primary homes are protected until January and in any case for the law to become active it would take the approval of regulations, which the government said would go through parliament.

Opposition parties sought to justify their action by blaming the government for delays in tabling the insolvency framework.

DISY leader Averof Neophytou said in essence the only thing achieved by the opposition was to send lenders the message that parliament waited for the tranche to be released before suspending the law.

Neophytou said parties had to choose between their credibility among their voting clientele and Cyprus’ credibility.

Considering international developments like the situation in Russia, and the instability in Greece, it would not be prudent to add to the problems, Neophytou said.

AKEL leader Andros Kyprianou said the foreclosures law was active and the regulations still pending only concerned auctions.

He claimed that banks were preparing to go ahead on January 1 and argued that the vote to suspend had been delayed because they wanted to give time to the government to prepare the insolvency framework.

DIKO chairman Nicolas Papadopoulos said parliament was called on to legislate not by choice but by necessity.

He went on to accuse the government of delaying in bringing the insolvency framework to parliament so that it came to force at the same time with foreclosures at the start of next year.

EDEK MP Nicos Nicolaides suggested that parliament was sending out the message that it wanted the foreclosures law to go ahead “but through procedures that secure the people at risk of losing their home and small business because the dire economic situation.”

 

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